Amazon Comfortably Passes Wall Street Expectations, More Steady Growth
Following eBay, retail and cloud giant Amazon has reported financial results for the second quarter. Amazon’s Q2 net-income was $191 million or 41 cents a share compared with $207 million or 45 cents in the same time last year. While this figure declined year-over-year, the company- similar to several others including eBay – accounts it to increased spending on expansion. Amazon didn’t disappoint analysts though.
“Despite the profit drop, results surpassed forecasts. Analysts polled by Thomson Reuters were looking for earnings of 35 cents a share. Amazon’s earnings per share beat those expectations by 17%, marking its largest positive surprise since the fourth quarter of 2009, according to Standard & Poor’s.”
Amazon’s net-profit comes alongside a 51 percent year-over-year sales growth, $9.91 billion, compared to analysts’ estimates of $9.37 billion. The company expects sales between $10.3 billion and $11.1 billion in Q3, compared to the $10.4 billion Wall Street average, and despite lowered profits, investors are more than confident in the company’s growth. Its shares were up 6 percent in after-hours trading today at $228.99, up 19 percent this year.
Amazon does not disclose specific numbers when it comes to non-sales revenue, meaning its Kindle eReader and Amazon Web Services. Overall, however, the company did report $359 million in revenue in this area, a figure that, while fairly small compared to its core business, still represents more than a 50 percent increase from the $203 million in made during the same period last year.
For the third quarter, Amazon’s forecasts stands at operating profit of $20 million to $170 million, and we’ll see more spending further down the road. The company plans on investing $900 million in new datacenters and warehouses, including a logistics hub in the U.K. that will become fully operational by 2012.
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